10-QPeriod: Q2 FY2020

CrowdStrike Holdings, Inc. Quarterly Report for Q2 Ended Jul 31, 2019

Filed September 6, 2019For Securities:CRWD

Summary

CrowdStrike Holdings, Inc. reported strong revenue growth for the period ending July 30, 2019, with total revenue increasing by 94% year-over-year to $108.1 million. This growth was primarily driven by a 98% increase in subscription revenue, indicating strong customer adoption and expansion of their platform usage. The company's customer base more than doubled, growing by 111% to 3,789 subscription customers. Despite this significant revenue growth and improved gross margins (71% overall, with subscription gross margin at 74%), the company continues to operate at a loss, with a net loss of $51.9 million for the quarter. This loss is largely attributed to substantial investments in sales and marketing (60% of revenue) and research and development (29% of revenue), as well as a significant increase in general and administrative expenses (28% of revenue), partly due to increased stock-based compensation following their recent IPO. The company ended the period with a strong cash position of $732.8 million, bolstered by the IPO proceeds.

Financial Highlights

47 data points
Beta

Revenue

$108.11M

70.8% Gross Margin

Net Income

-$51.89M

-48.0% Net Margin

EPS (Diluted)

$-0.10

Total Assets

$1.17B

Cash & Equivalents

$732.81M

Free Cash Flow

-$27.83M

Financial Statements
Beta
Revenue$108.11M
Cost of Revenue$31.58M
Gross Profit$76.53M
R&D Expenses$31.63M
Operating Expenses$127.17M
Operating Income-$50.64M
Interest Expense$164K
Net Income-$51.89M
EPS (Basic)$-0.10
Shares Outstanding (Basic)520.36M

Key Highlights

  • 1Total revenue surged by 94% year-over-year to $108.1 million.
  • 2Subscription revenue demonstrated robust growth, increasing by 98% year-over-year to $97.6 million.
  • 3The customer base expanded significantly, growing 111% to 3,789 subscription customers.
  • 4Overall gross margin improved to 71%, with subscription gross margin reaching 74%.
  • 5The company raised substantial capital through its Initial Public Offering (IPO) in June 2019, resulting in $732.8 million in cash and cash equivalents.
  • 6Despite revenue growth, the company reported a net loss of $51.9 million for the quarter, reflecting ongoing investment in growth and operations.
  • 7Operating expenses, particularly Sales & Marketing and General & Administrative, increased significantly as a percentage of revenue, driven by growth initiatives and IPO-related costs.

Frequently Asked Questions

CrowdStrike reported a significant increase in total revenue, growing 94% year-over-year to $108.1 million for the three months ended July 31, 2019. Subscription revenue, the primary driver of this growth, increased by 98% to $97.6 million.

The company experienced substantial customer acquisition, with the number of subscription customers growing by 111% from 1,800 in the prior year period to 3,789 as of July 31, 2019.

While CrowdStrike demonstrated strong top-line growth and improved gross margins (71% overall), it reported a net loss of $51.9 million for the quarter. This loss is attributable to continued significant investments in sales and marketing, research and development, and general and administrative expenses, which increased substantially, partly due to expenses associated with the recent IPO.

Following its Initial Public Offering (IPO) in June 2019, CrowdStrike significantly strengthened its financial position, ending the quarter with $732.8 million in cash and cash equivalents. This provides ample liquidity for ongoing operations and strategic investments.